New home construction to drop in 2008: CMHC
Last Updated: Thursday, May 15, 2008 | 10:50 AM ET
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Higher mortgage costs are expected to slow new home construction in 2008, but numbers will remain high by historical standards, the Canada Mortgage and Housing Corporation said Thursday.
The CMHC predicts residential construction will drop to 214,650 units in 2008 from 228,343 in 2007, and seven of the 10 provinces will register a lower number of housing starts.
"Most of the pent-up demand that built up during the 1990s has now been fulfilled," chief economist Bob Dugan said in a release.
The Bank of Nova Scotia economics department also weighed in on the housing front Thursday, stating that home resales are running about 15 per cent below last summer's historic peak.
Adjusted for inflation, the average resale home price in Canada saw its first quarterly decline in seven years in the first quarter of 2008, the bank said.
The effects are most visible in the hottest urban housing markets, including Calgary and Edmonton. Both centres have officially moved into a buyer's market, the bank says, blaming the situation on soaring prices weakening demand.
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